Connect with us

Crypto Research

Modern Economic Nonsense — Government opens ideas to the public about cryptocurrencies

Published

on

Join BitDAO to earn a $BIT token here

The US government opens a public discussion about cryptocurrencies and their future. Moreover, it opens the door to inviting the crypto industry to solve future fiat currency problems.

Background

The government’s decision to open a consultation period with the public about cryptocurrencies is a necessary move towards regulation in their country. It’s an important step in the right direction towards acceptance of cryptocurrency, as well as blockchain technology. It also shows that the government is seeing the potential of blockchain and cryptocurrency in the future and want to make sure they’re prepared for when these technologies become more mainstream. The US wants to become a crypto hub for the future of the digital currency that moves forward.

What is being proposed?

When it comes to cryptocurrencies and blockchain, the US may take a very “hands-off” approach. They’re open to allowing cryptocurrencies to be traded freely in their country, as well as blockchain technology. This is encouraging news for investors in the cryptocurrency world, as it shows that the government is on the same page when it comes to the potential of these technologies. Malta is proposing to make cryptocurrency exchanges follow the same rules and regulations as the stock exchanges. This means that exchanges would have to be licensed, as well as go through audits. This is a good thing for the cryptocurrency world, as it will bring more legitimacy and trust to the exchanges. If a country like the US can implement cryptocurrency regulations, other countries can also.

Limiting cash transactions and imposing licensing regulations

The government wants to open its door to cryptocurrencies since current high inflation persists in the economy. This is an interesting proposal and one that is sure to spark some debates, as it’s very rare to see an open government discussion on possible adaptation of the future money. The reason for this is to prevent money laundering and other illegal activities while having an opportunity to lead future technology advancement once again. When it comes to licensing, two different types of licenses could be issued. The first license would be for exchanges, while the second would be for corporate adaption. Depending on what the government decides, both of these licenses could be combined or separated.

Conditions to be met for the issuance of a cryptocurrency license

The government wants to make sure that the exchanges, as well as the crypto projects that are allowed to operate in their country, are legitimate and trustworthy. They’ll do this by making both of these groups meet certain conditions that must be met before they’ll be granted a license. The licensing authorities will keep an eye on the projects and exchanges to make sure that they follow the rules and regulations. This will include making sure that the projects don’t violate the rights of others financially, such as investors. The government will also have a “sandbox” for exchanges and projects, which means that they’ll test them in a controlled environment before they are allowed to operate on their own. This will help make sure that everything is legitimate and trustworthy.

Regulatory provisions for crypto services

The government has included some crypto services provisions, such as smart contracts. They want to make sure that the services that are granted a license are trustworthy and that they won’t be able to be hacked. They also want to make sure that they’re safe and that they won’t be able to be used for malicious purposes. The government has proposed having a regulatory body that is in charge of these services. This body will also keep an eye on the services to make sure that they’re following the regulations. The government also wants to make sure that the public is safe when it comes to these services. They’ve proposed that there be a set of safety standards and a code of conduct for the users of these services.

Monitoring requirements for digital currency hosting services

The government has proposed monitoring requirements for digital currency hosting services. This includes monitoring what types of services are being provided by these companies, as well as the volume and size of their transactions. This is important for monitoring money laundering and other criminal activities, as well as for making sure that the services are legitimate. In addition, the government has proposed that anyone who hosts digital currency and provides services related to cryptocurrencies should be registered with the Financial Intelligence and Investigation Division, or FIOD. This will help track the flow of money and make sure that it’s not tied to criminal activities.

Final words

The US government is taking a very open and accepting approach toward cryptocurrencies and blockchain technology. Of course, they want to implement regulations and monitoring to ensure that everything is legitimate and safe, but they’re not trying to halt the industry as some other countries have. They’re also looking to make the US a hub for blockchain and financial technology, and they’re taking the first steps towards making that happen.

Reminder: I am not your financial advisor. 

Buy me a coffee here if you want to support my writing.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Crypto Research

The Future of Machine War II

Published

on

In late 2021, I wrote an article about A.I. vs. Blockchain. I realized it was closer than I expected.

https://medium.com/@xuanling11/artificial-intelligence-vs-blockchain-the-future-of-machine-war-b685d208ba20?sk=874af90c7acbe857fa004c0ebe0d5e28

Web2 is leading a future of technological centralism. 

The way we see the world in ancient is what we saw became what we believed. Later, the enlightenment process helped humans realize what they had seen was disguised by the nature principle. Once we tested our assumption and received accurate results, we thought we had mastered the nature principles. Yet, we did not make the world better than we thought we could. 

We are living in a world in which companies know more than you than yourself. Companies can likely tell you what you should believe without letting you know. 

The secret weapon that companies like Google invented is A.I. or Artificial Intelligence. 

If A.I. can think like a person, it can easily replace you! Since companies got all your data, you freely offer them by using their free services, and they can replace you one day without you realizing it. 

Without all conspiracy theories behind what Google may or will secretly develop, A.I. reaching consciousness is … impossible.

If it does, Google has successfully made a human – dumb!

The most advanced A.I. – Tesla Autopilot Program cannot distinguish objects between humans and other moving objects during driving.  

Using technology makes people dumber than they think because it takes away your consciousness – the ability to think uniquely!

Blockchain is the future of decentralization.

We need a peer-to-peer system to regain consciousness and break the chain from Web2. 

It gives individuals the power to rethink information.

Think about today’s media; all information is filtered to offer readers without any surprise. News is data that Web2 selected specifically for you to read. 

We need a decentralized system so that you can receive unfiltered information and gives you a surprise that sparks ideas of imagination.  

Web2 is afraid of the blockchain because they are too big to fail. 

 They mimic the blockchain by creating a centralized node system – social media network. 

It is a net growing outward through a single point. Only the problem is that connection is facilitated by technology. And the biggest failure is such technology has a single point of failure problem. 

And they cannot escape the law of economics – the law of diminishing. So we will see Web2 grow slower due to the law of diminishing that they require more data with few increments of advancement through A.I. without any breakthrough because A.I. is a deterministic system that works with a lack of randomness. 

In Web2, they assumed everyone was stupid, and they offered solutions to everyone.

In Web3, everyone is good and should anticipate solving a problem together.

If you enjoy reading my articles, buy me a coffee here.

Photo by Aideal Hwa on Unsplash

Continue Reading

Crypto Research

Financial sanction to mixers

Published

on

Have you heard about financial sanctions from the US on virtual currency? At least, I have not yet. But the US Department of Treasury has issued sanctions on two crypto services: Blender.io and Tornado Cash.

To clarify, the US sanctions on tools but not target specific entities or groups of people.

So why bother to sanction something that the government probably won’t be able to sanction in the first place?

What is a mixer?

A cryptocurrency mixer, sometimes referred to as a tumbler, is a tool for money laundering. The sole purpose of the invention is to make transactions untraceable.

How to mix?

Even crypto is pseudo-anonymous, but it is traceable through your wallet address. A mixer is a black box service to filter your traceable wallet address into the untraceable wallet address.

How to wash your money clean in the traditional way?

https://dimensiongrc.com/the-stages-of-money-laundering/

The assumption is you will not get caught at each stage, and then you place your dirty money in a bank through companies and use the funds to purchase legal goods like houses or luxury goods.

There are mature regulations and rules to stop you from putting your dirty money into banks.

Digtial money landury

https://www.eurospider.com/en/know-how/compliance/211-what-is-a-cryptocurrency-mixer

A Crypto mixer or tumbler is a service to pool dirty digital currency in their favor and redistribute it into designated wallet addresses or addresses randomly generated. 

It is a challenge to stop transactions because there is no entry point for law enforcement to stop at each stage. 

https://home.treasury.gov/news/press-releases/jy0768

Ultimate Mixer

Tornado Cash is the king of the mixer. Unfortunately, there is just no way to trace transactions anymore. It is a smart contract with zk-SNARKs (zero-knowledge proofs) that does not require revealing a wallet address during transactions and ghostly distributed funds without leaving any traces.

This tool is the ultimate weapon that the government has to shut down, or there is no way to prevent transactions.

In Conclusion

Let’s change the future – legally. 

If you enjoy reading my articles, buy me a coffee here.

Photo by Espen Bierud on Unsplash

Continue Reading

Crypto Research

Why there is not crypto banking exist

Published

on

We have always heard about cryptocurrencies, crypto exchange, banking, and trading platforms, but we do not really grasp the idea of crypto banking. Crypto banking is a contradicted idea. If crypto is to replace banks and give users full control of digital money, why do you put your crypto into the bank? The new research paper argued that there are risks for banks to adopt crypto, but they did it anyway.

Banks want crypto

Cryptocurrency has a rough road at the beginning and continues to experience a bumpy road ahead. The institutional investors were watching its performance. In early 2017, institutional investors had opportunities to adopt crypto, but they found out the return of the investments was less than traditional financial assets. Regulations were not a concern for some individual institutional owners, but banks were conservative at the time. As a result, some investors adopted it in early 2018 than banks did. Then suddenly, the crypto market took off in 2020, leaving many banks to regret their decision in 2017. Many banks set up their digital investment group to rush into the market and increase prices. Of course, many of their investment positions are instead of shadow positions. It is unclear how much they have been invested in and what vehicles they took to invest in cryptos.

Crypto Exchange

Crypto exchange is a bank-like platform for crypto. Banks offered a place to purchase fiat currency. Crypto exchange did the same duty as traditional banks did. Since there was a gap between the crypto and banks, the crypto exchange took responsibility and offered crypto services. The crypto exchange took off after 2020, and they left banks in the dust. Then, crypto winter came in early 2022, and banks again hesitated to enter the crypto and started denouncing crypto usage, particularly in the Defi area. But interestingly, they tried to find ways to get into crypto without being directly exposed to cryptocurrencies—hint: through hedge funds.

How much banks exposure to crypto

We do not know how much banks have been exposed to crypto. We learned that the big Wall Street players were exposed to the services of the digital asset through State Street of their $41.7 trillion assets. Some have been exposed due to Luna’s collapse and 3AC bankruptcy. But again, no specific dollar amount was provided. 

Survivors

Since the crypto winter, institutional investors have been cautious about crypto exposure. However, crypto exchanges are the winner again. They are exposed to crypto and take risks more than banks do. As a result, they likely will weather the uncertainty. Furthermore, there is no need for crypto banking to handle your crypto assets since many such services will not survive long in the crypto environment. 

Crypto is resilience

Despite its fluctuating price and unsecured assets, crypto is resilient to phase out any bad business ideas and bad actors in the economy who wants to or try to dominate the market but who transfers risks to users to believe they are the one who should take responsibility for their carelessness. Unfortunately, those business models will not survive long.

If you enjoy reading my articles, buy me a coffee here.

Photo by Luke White on Unsplash

Continue Reading

Trending